India: PELLEX remains stable on muted trade

• Odisha sellers show interest in Raipur buyers
  
  
• Trades muted amid slow buying interest
  
  
• Bid-offer gap narrows as offers dip in Raipur
  
  

BigMint's bi-weekly domestic pellet (Fe63%) index remained stable at INR 10,650/t ($128/t) DAP Raipur on 14 June, 2024 compared to the last assessment on 11 June. No active deals were recorded in Raipur due to sluggish market sentiments. Odisha-based pellet makers still showed interest in selling material in the Raipur region at around INR 10,200-10,300/t (Fe 62.5%) but no deals were witnessed in this publishing window.

Pellet trading activity in the Raipur region remained limited due to buyers' cautious approach. Most buyers adopted a wait-and-watch strategy in response to the ongoing decline in sponge and finished steel prices in the central-eastern regions.

P-DRI prices fell by INR 850/t ($10/t) w-o-w to INR 26,850/t ($321/t) exw on 14 June. Meanwhile, prices dropped by INR 250/t ($3) d-o-d. Limited trading activity was reported, as buyers had already placed enough orders yesterday.

Market sources informed that the bid-offer gap narrowed in the region after Raipur-based pellet plants cut prices. However, trading activity may resume in the next week post-OMC auction as buyers are waiting for price clarity.

Raipur pellet offers dropped to INR 10,700-10,800/t ($129-130/t) exw recently. The major pellet producers in Raipur did not offer pellets though they cut offers for Fe 66% grade pellets to INR12,800/t exw today. No major deal was recorded post-price deduction in Raipur.

A market participant said: "Buyers are not in a hurry to buy material on falling sponge and finished steel prices. Sponge makers are maintaining sufficient inventory of pellets from previous bookings. However, some participants are waiting for the OMC iron ore auction to be held next week ".

Other market updates

• Billet prices down w-o-w: Billet prices in Raipur fell by INR 1,250/t ($16/t) w-o-w to INR 43,050/t ($515/t) exw today, while prices decreased by INR 300/t ($4/t) on a d-o-d basis. The index decreased further today due to weak market sentiments and demand in the semi-finished and finished steel segments. Buying activity was largely muted.
  
  
• NMDC iron ore auction result: NMDC auctioned 109,200 t of iron ore on 11 and 12 June from its Bacheli mines. As per sources, around 25,800 t of DRCLO (10-40 mm, Fe 67%) got booked at INR 8,750/t (15.5% premium) against the base price of INR 7,576/t while 34,000 t of fines (Fe 64%) got booked at a base price of INR 5,652/t. The steelmakers booked around 6,000 t of Baila lumps (10-20 mm, Fe 65.5%) at INR 8,190/t against the base price of INR 7,000/t. Prices are on ex-mines/FOR basis, included royalty, DMF and NMET.
  
  

Rationale

• PELLEX has been derived using data points, i.e., trades, offers, and bids. To download the detailed methodology Click here.
  
  
• No deal was reported so far in this publishing window and was not considered for price calculation and accorded 0% weightage for T1 trade.
  
  
• Eighteen (18) firm offers, bids, and indicative prices were heard. Fourteen (14) were taken for price calculation and given the balance 100% weightage.
  
  

Outlook

Raipur pellet prices may remain volatile in the coming days and market participants will get clarity post-OMC's auction. Sponge and other semi-finished prices may impact pellet prices in the coming week.